In a review of Mississippi’s ratings released on Friday, Standard & Poor’s said the state’s AA general obligation debt rating reflected a strong financial position because of healthy reserves, despite decreased revenue collections for fiscal 2009 and fiscal 2010.
The agency also credited the state with having historically conservative and proactive fiscal management, allowing it to maintain financial stability through subsequent revenue declines, strong embedded fiscal policies and practices, and a moderate, although increasing, debt burden.
Offsetting rating factors include Mississippi’s relatively limited economy, low wealth and income indicators with some of the nation’s highest poverty levels and lowest educational levels, and a high 10.4% unemployment rate that is worsening because of the national recession.
Mississippi has $3.4 billion of outstanding GO debt. Standard & Poor’s rates its $33.75 million of appropriation debt AA-minus and its $280 million of outstanding liquidity facility debt AA/A-1. All ratings have a stable outlook.
For fiscal 2009, year-to-date revenues were approximately $384.2 million below forecast, with most of the state’s revenue sources exhibiting significant declines, said a report by analyst Kate Choban.
For the first two months of fiscal 2010, general fund collections were $32.4 million or 5.9% below estimates. The working cash stabilization reserve fund is projected to total $245 million at year end.
Mississippi also has four public retirement systems that combined have an unfunded actuarial accrued liability of nearly $8 billion.